Business activity in Iran’s export billet segment has been quiet lately, first due to unfavorable market conditions and falling prices globally, but then due to the export tax situation and expectations.
Iranian authorities, which have previously announced the increase of the export duty for billet from 0.5 percent to 2 percent, will now have to evaluate the recent court decision, ruling that any tax above 0.5 percent is illegal. Such a development has inspired the producers and exporting traders, although there is no timeline on the abolishment of the export tax increases.
As a result, according to sources, no export tender has been closed lately, while the workable price is estimated mainly at $440-450/mt FOB, especially if it is later to be sold to Asia. "Prices for Iranian billet have not gone below $500/mt CFR on contrary to rumors last week. These were just traders fishing. The lowest real billet offer is $500-505/mt CFR," a source from Indonesia commented.
In the GCC, the workable billet prices might be somewhat higher on the FOB basis, especially for the shorter lead time. In fact, the latest deals by traders were closed around 15 days ago to the region at around $455/mt FOB. “Only partial tonnages were sold for exports – mainly for the GCC region because local market and demand in North Dubai went up and mills also decided to supply locally. The recently announced tax was again cancelled and now mills are basically analyzing the outcome and situation before announcing new sales,” an international trader said.
